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Benefits Business

Health care law—still in flux

The sorting out of implementation continues

By Len Strazewski

It's quiet—too quiet. But not on all fronts.

After the U.S. Supreme Court affirmed the constitutionality of the Patient Protection and Affordable Care Act (PPACA), the political battlefield that developed over the law has become disturbingly still. Presidential candidate Mitt Romney still fires the occasional salvo, threatening a repeal effort but, in general, political debate has entered a ceasefire.

Not so the stakeholder debate, which continues and grows even more fragmented. American consumers, employers and the health insurance industry are more divided than ever—even as key provisions move toward their 2014 implementation date and face an important intermediate deadline.

As the comprehensive package of access guarantees, market reforms and tax penalties and incentives goes forward, the groups most affected by the law are taking distinctly different and self-protective positions.

Insurers are protecting their products, agents and brokers their compensation, employers their plan designs and cost containment programs. Each has its own issues and rhetoric.

And consumers? Most Americans are still divided and a little confused. An NBC News/ Wall Street Journal poll of 1,000 registered voters, conducted in mid-July, indicated that while slightly more respondents had come to an opinion on the topic compared to an earlier poll, there was no clear consensus of national sentiment,

About 40% of respondents think the law is a good idea, 44% think it is a bad idea and 15% have no opinion, compared to 35% who approved, 41% disapproved and 22% who had no opinion in June.

A July Fox News poll, co-conducted jointly by Republican and Democratic pollsters, of 901 registered voters confirms the split. The same percentage of respondents (46%) agreed and disagreed with the Supreme Court decision, with 9% unsure.

The poll also indicated that after the Supreme Court ruling, more respondents—more than half—were more worried about their personal health care. About 51% said they were more concerned about their personal health care and only 36% were reassured. About 9% felt about the same.

The insurance industry is also split. Immediately after the Supreme Court decision, the Washington-based Independent Insurance Agents and Brokers of American (IIABA) expressed disappointment with the decision, charging that the law is reducing compensation for independent agents and brokers—a danger that is going unrecognized by regulators.

In a press release, Robert Rusbuldt, IIABA president said, "Our association, economists and other industry leaders and experts agree that many of the provisions in the PPACA are causing more harm than good. The Big 'I' will continue to work with Congress to repeal provisions of the law that negatively impact our small business members and the customers they serve."

He noted that since the PPACA was upheld in its entirety, except for the narrowing of the Medicaid enforcement, implementation will move forward as scheduled. Most important for agents, the medical loss ratio (MLR) provisions that went into effect last year survived the challenge. These provisions have led to cuts in compensation of up to 50% in some areas of the country, he said.

Health insurers, however, responded to the decision with cautious acceptance and support for both access and market reform provisions. Karen Ignagni, president of the Washington-based health insurance trade group, America's Health Insurance Plans, said about the ruling: "Individuals and families need secure affordable coverage choices. Maintaining the link between market reforms and universal coverage is essential to avoiding significant cost increases and loss of choice for consumers and employers.

"As the reform law is implemented, health plans will continue to focus on promoting affordability and peace of mind for their beneficiaries. The law expands coverage to millions of Americans, a goal health plans have long supported; but major provisions, such as the premium tax, will have the unintended consequences of raising costs and disrupting coverage unless they are addressed.

"Health plans will continue to work with policymakers on both sides of the aisle to make coverage more affordable, give families and employers peace of mind, and promote choice and competition. Health plans also will continue to lead efforts to reform the payment and delivery system to promote prevention and wellness, help patients and physicians manage chronic disease, and reward quality care."

Employers, who pay most of the cost of health care coverage for tens of millions of employees, take still another position. They are quietly fighting to protect their leadership in employee benefit design and their cost containment and wellness plans.

James A. Klein, president of the American Benefits Council in Washington that represents benefit plan sponsors and benefits service providers, lauded market reforms that would increase access and lower costs but called for more clarity on employer responsibilities—and rights under the law. "Throughout the legal challenges to the Patient Protection and Affordable Care Act, the vast majority of employers remained focused on meeting their obligations under the law. Whatever steps Congress and the Administration take from today forward must clarify—not complicate— employer responsibilities. "If both branches of government focus on scoring political points, rather than helping employers and health insurers meet their obligations, the majority of Americans who rely on employer-sponsored coverage will suffer," said Klein.

"Employers have had two straightforward goals for health care reform over the past two years since the law was enacted," Klein said. "First and foremost, employers want reforms to lead to lower costs and higher health care quality. We must not let up for a moment on the urgency of pursuing the valuable provisions of the law that aim to reduce unnecessary errors in our health care system, reward proven performance and make health care information more transparent for both consumers and purchasers. And second, employers need timely, practical and flexible guidance interpreting the law so they can continue to meet their compliance obligations."

Klein said employers need answers quickly to their questions about their specific responsibilities and alternatives, "especially those related to the 2014 'shared employer responsibility' provisions, how federal regulators will interpret the increased incentives for employer wellness programs, and whether the health insurance exchanges will operate as intended and be prepared to administer the new and complex premium subsidy program."

How will these diverse positions affect implementation? The first comprehensive test will be implementation of health insurance exchanges. Insurers will fund them, agents and brokers will market them, employers may choose to refer employees to them, and consumers are the ones who are supposed to benefit.

But scheduled to provide coverage by January 2014, the health exchanges are far from ready. By the end of July, only 16 states had met a November deadline to announce their plans for exchanges. And few have released rules about how each of the stakeholder groups will co-exist.


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